Itxa/3887/2010 Of S.p. Builders v. Commissioner Of Income Tax -12

sas IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.3887 OF 2010 S.P. Builders ..Appellant. V/s. Commissioner of Income Tax ..Respondent. Mr. J.G. Aroro with V.S. Hadade for appellant. Mr. D.K. Kamwal for respondent. CORAM : J.P. DEVADHAR AND R.M. SAVANT, JJ.DATED : 22ND NOVEMBER, 2010 P.C. :- 1.The short question raised in this appeal is, whether the amount of Rs.2.77 crores receivable by the assessee pursuant to an agreement for sale entered into by and between the assessee and Kalpavruksha Developers on 28/02/2005 is liable to be taxed in A.Y. 2005-06 or is it taxable in AY 2007-08 when the amount is actually received. Perusal of the order of the Tribunal shows that on the date of sale agreement dated 28/02/2005, the assessee was not in possession of the property agreed to be sold and, therefore, the sale was effected on as is where is basis. In fact, on the date of sale, the Suit filed in the Small Causes Court was pending. The argument of the appellant is that in spite of the sale agreement dated 28/02/2005, in view of Section 52 of the Transfer of Property Act, the appellant could not have transferred the property in favour of the purchaser during the pendency of the Suit in the Small Causes Court at Bombay. Once it is found that the property was sold on as is where is basis and the sale consideration was payable in instalments as set out in the sale agreement, the decision of the Tribunal that the assessee, following the mercantile system of accounting was liable to include the amount of sale consideration in the year in which the sale agreement took place cannot be faulted. In our opinion, the finding of fact recorded by the Tribunal does not call for any interference. We, therefore, see no merit in the appeal. The appeal is dismissed with no order as to costs. (R.M. SAVANT, J.) (J.P. DEVADHAR, J.)